March 8, 2005 Seattle, WA SEPG 2005 OID and CWI · PDF file2 Relationships in OID and CWI Key...

Return on Investment (ROI) from OID and CWI

Ron Radice, Alka Chawla, and Radhika Sokhi

SEPG 2005Seattle, WAMarch 8, 2005

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Topics

1. Organization Innovation and Deployment (OID) and Continuous Workforce Innovation (CWI) relationships

2. Process improvement flow3. Criteria for acceptance4. Measuring ROI for process improvements5. Examples of ROI within Tata Consultancy Services (TCS)

• Delivery processes• People processes

6. Measuring ROI for process improvement in its entirety7. How an organization can motivate OID/CWI8. Who should be involved?9. The limits to possibilities with OID/CWI

2

Relationships in OID and CWI

Key similarities• Focus on continuously improving process activities• Innovative and incremental viewpoints• Organization orientation

Stronger focus in CWI (P-CMM®) on • Establishing a framework for continuous improvement• Empowering to enable continuous improvement of performance• Eliciting opinions from all in the organization about working

conditions and areas for improvement • Setting quantified objectives for improvement • Evaluating the effectiveness of improvements• Most importantly CWI address improving workforce practices in

addition to delivery process management practices as OID does

OID (CMMI®) provides more for• Planning the Process and Managing Configuration

SM SCAMPI is a service mark of Carnegie Mellon University.® CMM and CMMI are registered in the U.S. Patent and Trademark Office by Carnegie Mellon University.

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Why are OID/CWI at level 5?

Level 2 M&A in CMMI flows from and provides data for business goals and project processes which become input to organization processes

Level 3 provides the infrastructure with process groups and baseline process definitions

Level 4 provides more data about areas of possibility, which• Invites the minds of the associates to find opportunities• Motivates management to ask questions for change

CAR in CMMI at Level 5 is a direct source for OIDCCI in P-CMM at Level 5 is readily converted into CWI OPA in P-CMM at Level 5 enables alignment of CWI to organization

objectives

Does and organization need to wait to Level 5?If they do, they will lose opportunity

that is facilitated at Levels 2 and 3 and enabled at Level 4

4

Individual and Project level

Initiatives

Individual and Project level

Initiatives

High impact Initiatives at Enterprise Level

High impact Initiatives at Enterprise Level

Development Centre (DC) / Account /

Relationship Level Initiatives

Development Centre (DC) / Account /

Relationship Level Initiatives

From incremental at the individual and project level to quantum leaps at CorporateFrom incremental at the individual and project From incremental at the individual and project level to quantum leaps at Corporatelevel to quantum leaps at Corporate

$

time

Incremental and Innovative Improvement

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Piloting as appropriateDEPLOYMENT:Training, Facilitation, Project Management Reviews Audits, Process Owner Prime Meetings, Deployment Task Force

TCS Strategy Map

Rewards & Recognition Program

PIPs Associate Satisfaction

Supplier Management

Audit & AssessmentFindings

Technology tracking

Benchmarking

Process Data Analysis

Customer Satisfaction

Information

Analysis

Continuous Process Improvement

Status and ROI reports

to all stakeholders

6

PIP acceptance and Pilot CriteriaWhen does a Process Improvement Proposal (PIP) get accepted?

Criteria and associated weightage address• Organizational goals and alignment with the TCS strategy

map; e.g., productivity, cycle time, and quality• Defined qualitative / quantitative benefits• One time or recurring benefit• Implementation complexity• Applicability to all associates

When to pilotNew and unproven technology/process change

- If the impact on the process for such changes is high- Span of change is wide across the organization- Segmental; e.g., selected geographies may have key dependencies- Temporal; e.g. for a specified period of time

When not to pilotObvious and clear valueTime is of the essenceThe change is critically needed

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Deployment CriteriaWhen to deploy

• Deploy the change based on pilot results

− Improvement is fit for purpose− Actual ROI > Projected ROI

• Direct deployment• Nothing existing that could be

disrupted; e.g., for employee self service processes in Ultimatix such as claims, leave, travel, and Audit Processing Tool no pilot was done, since the processing was manual earlier

Warning! Long drawn pilots may sometimes

kill the initiative.You cannot cross a chasm in steps.

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Measuring ROIWhat should we like to find?

Improvements in:• Delivery processes

• Effort, schedule, and product quality within the project life cycle• Service levels in Production Support• Infrastructure costs, business process streamlining

• People processes • Results of Employee Satisfaction Surveys, Customer Satisfaction Index• Cycle time and effort

– Administration, Staffing, Competency Development

• ROI = ratio of savings / total costs for the improvement throughdeployment

• ROI calculation • Over the length of time needed for the improvement to attain full maturity• One year view for savings

– if the period is less than a year, ROI is extrapolated for a year based on actuals

• When the savings or benefit are obvious, ROI may not be calculated, especially in people processes. • For initiatives with customers, ROI is calculated per customer specified process.

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Example ROI CalculationsExample ROI Calculations

4.43.3936.23123.5SumSum

Overall ROI for SPI in one Centre64.4731

Kick-off meeting templatePIP-126

4.73.34.314

Status Report template for PI

projectsPIP-356

5.34416

Estimation template for Use

caseSPI-08

9.48.821185.5PMR ToolSPI-07

50.824.00.512.0Scatter chart

template PIP-635

Actual ROI Projected

Annualized ROI

Projected Annualized

Costs

Projected Annualized

SavingsSPI DetailsImprovement Reference No.

ROI for Sample Improvements - Measured in person days

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Delivery processes 1 of 8

Individual / Project Level: PIPs

• Defect prevention and tools; e.g.,– Beyond Compare: to synchronize code configuration between

sites

– Insure++: reduced rework effort through early detection of memory leaks

– Use case Estimation Guideline and template

– Conversion tools

– NCR average open days through a Six Sigma project

PDCAROI 24.26 and savings of $58K

ROI 4.28 and savings of $95K

ROI 5.33 and savings of $1.6K

Reduced from 31 to 12 days


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DC / Account / Relationship Level

Joint Program Management and Early Program Maturity

• Strong Defect Prevention practices

• Taking on increasing offshoringresponsibilities for upstream processes and more complex assignments

• Quantified expertise levels that match customer expectations used for planning content delivery and gauging team maturity to take complex assignments

• Overall productivity improvement

Zero bad fixes for the past 1 year

1Q04 – 100% reviews done by customer vs 3Q04 – 15% reviews

done by customer

Productivity Trends

0

0.5

1

1.5

2

2.5

4Q03 1Q04 2Q04 3Q04 4Q04

Prod

uciv

ity

0

50

100

150

200

250

300

Tota

l CR

s

Total CRs Productivity

Productivity Trends

0

0.5

1

1.5

2

2.5

4Q03 1Q04 2Q04 3Q04 4Q04

Prod

uciv

ity

0

50

100

150

200

250

300

Tota

l CR

s

Total CRs Productivity

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Customer Facing Proactive Improvement Programme– Improvements such as

» process streamlining and automation» performance tuning» use of TCS tools CONSULT for production support,

REVINE for reverse engineering» domain and technology Centres of Excellence (COEs) for

competency building

Savings of $202K

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Six Sigma – ACFC (At the Customer For the Customer) projects kicked off

and executed at the customer’s location to bring improvements in a customer’s process

– Defect reduction, cycle time reduction, cost reduction, cost avoidance, effort reduction,

– Reduction of wastes, rejects and recalls– The Customer provides a sign off on the benefits upon

realization of the same

6σ6σ6σ6σ

$17M annualized savings for the period 2002 - 2004 based on actuals in the deployment period

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Relationship Level for Production SupportCPU usage reduction in cumulative hrs

0

2

4

6

8

10

12

14

16

18

year1 year2 year3

15700 cumulative

hours

12937cumulative

hours

10228 cumulative

hours

CPU usagereduction

At least 15% reduction over

Year 2

At least 15% reduction over

Year 1

At least 15% reduction over previous year

Average ABEND

reduction

183050Average # of tickets per day

>860000 >717000 >613350 # of jobs per month

322314306Systems supported

Year 3Year 2Year 1Year

Average # of tickets per day

0

10

20

30

40

50

60

year1 year2 year3

Load

0100200300400500600700800900

year1 year2 year3

Systems supported

# of Jobs per month

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Delivery processes 5 of 8Delivery processes 5 of 8

Centre of Excellence (CoE @ DC Level)

Mechanisms• Pre-Sales Support• Technical Support• Competency Building Support• Reuse asset repository

Benefits • Productivity enhancement, defect reduction, shorter cycle time for

delivery– Asset repository

– CoE website


ROI 5.21 and savings of $3.9K

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Relationship Level

Streamlining the SDLC • Joint review and refinement of the testing process with the client

• An integrated process framework jointly developed with the client for product development, business acceptance testing, volumetrictesting, and user documentation

6% reduction in SDLC effort and 4% reduction in SDLC schedule

• 6 % improvement in productivity• Reduction in residual defects in production phase by nearly 50% of target• 33% time to market reduction with improved methodology and refined SDLC

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Enterprise Level• Strategy investments in tools and R&D e.g.,

• Mastercraft - support for large scale development through high levels of productivity from generated applications

• Revine - automating the manual process for use case documentation and impact analysis in re engineering projects

• Conversion tools e.g., PLI/IMS to PLI/DB2

1.2 to 2 times gain in productivity andsavings of 115py and ROI of 2.59

2 – 3 times productivity gain

ROI 14.88 and saving of 2500 person days

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Enterprise Level• Process Focus

• Digitization / automation of Metrics Program

• Web IPMS – tool for project management including Activity Based Costing, QA processes and metrics generation – based on TCS iQMS processes

• Web PAL – tool for knowledge management

• Uniform metrics dashboard




Savings of $76K

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People processes 1 of 7

Individual and Project Levels• Online pay slip • Globalnet for tracking associates’

claims and allowances• Connect to Europe – deputation

manuals for all countries• Revisions to overseas allowances • Increased insurance coverage

through new insurance provider

Where there was obvious or real time value

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DC Level

• Transportation portal to optimize transport costs

• EXOP (Exciting Opportunities) –initiative for effective allocation at DC level by establishing a digitized process for handling open positions with the involvement of associates.


Where there was obvious value


Benefits included:• Increased currency of “Profiles” & Competency” in Ultimatix• Improved planning of project allocation and release dates• Increased interaction of associates with MATC

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DC Level

•Management of transport facilities by Voyagers committee•Improvement to canteen facilities through Canteen committee•Fun @ Work – Forum for associates to host events together•Toastmasters Club•Floor Meetings – GL of a particular team, in association with a HR associates addresses the whole team, once a month

Employee Satisfaction Survey Index improvement (2003 – 04)

• Communication has moved up from .67 to .71

• Involvement and Flexibility and has moved up from .73 to .75

• Work environment has moved up from .73 to .75

Where there was obvious value

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Relationship Level• Six sigma improvement projects

– Telecommunication expenses

– Outstanding billings

• Empowering associates through Cross Functional Teams (CFTs) to execute processes and improve them

– Sample charter» Help all the members of our relationship achieve their work

objectives by facilitating services and guiding with empathy

» Add value to the organization by deploying repeatable processes and creating reusable assets

» Facilitate team building, empowerment, and grooming second-tier leadership

6σ6σ6σ6σReduction by 22%

saved $15.8K per month

Reduction of cycle time by 48%

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Benefits from Sample CFTs People processes 5 of 7Benefits from Sample CFTs People processes 5 of 7

• Maximum usage of resource• Procurement of S/W licenses faster• Link down time has reduced• Resolution on virus attacks faster• Shifting made easy

• PC allocations• Software (S/W) Procurement• Link Management

Infrastructure CFT

• Provided maximum panelists for recruitment from the relationship

• Follow-up of confirmations / appraisals• Providing panelists during recruitment

HR CFT

• Cycle time for training reduced• Cross training people on multiple

technologies to reduce dependence on Subject Matter Experts (SMEs)

• Provide knowledge on latest technology • Maintenance of virtual library on skill set

Technology CFT

• Training hours has increased• Better compliance to ILP training

• Tracks the Individual Learning Plan (ILP) and ensure attendance

• Updates training group with internal training hours

• Weekly reminder to clock time against training

Training CFT

BENEFITSDESCRIPTIONCFT

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Enterprise level– Efficient people management of a global, mobile, workforce spread across

distributed project teams; e.g.,– Performance management using SPEED tool for remotely located

supervisors and appraisees who have been moving across projects across the globe

– Employee Satisfaction Survey (ESS) administration– Administrative functions; e.g., claims, travel

– Toll free HR helpline– Expedite query resolution time – Data on problem areas and types available, allowing for further analysis

and action by HR / management

Reduced appraisal cycle time from 1 month to 1 week at DC level

Benefits include:• Guaranteeing accuracy, standardization, and timeliness to associates• Making certain that management is consistently updated aboutexceptions encountered in policies and procedures by associates

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Enterprise level– Empowerment

– Propel and PEEP for career development, group problem solving and mentoring

– Improving people management processes through cross functional teams; e.g., digitization priorities, improved communication mechanisms

– E learning

– Enterprise Management Program –a world class workplace initiative; e.g., Global Help Desk

ROI 1.45 and savings $1.04M

• Support Engineer to Employee ratio reduce from 1.94% to 1.34% for a large and complex setup like TCS• Eliminated the need for 174 additional engineers required to support 29,000 users

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For the program in its entirety in TCS

• Across TCS • ROI from individual and project process improvement

across all DCs in TCS

• Relationship level improvements not aggregated at TCS level

• Corporate initiatives

ROI of 2.65 and savings of $4.6M and in 2004

Reduction in cycle time through digitization and associated new processes

Cycle time reduction

0

1

2

3

4

5

6

Q102-03

Q202-03

Q302-03

Q402-03

Q103-04

Q203-04

Q303-04

Q403-04

Nor

mal

ised

Cyc

le T

ime

ManpowerRequest

CampusRecruitment

ExperiencedprofessionalRecruitmentMonthly Billing

Grievances

Cycle time reduction

0

1

2

3

4

5

6

7

8

Q1 03-04 Q2 03-04 Q3 03-04 Q4 03-04

Nor

mal

ised

Cyc

le T

ime Closure of books

Employee SelfServiceTransactionsReceivables

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How an organization can motivate OID/CWI• Communicate to all the Business Need and relationships; e.g.,

• Retain clients• Growth in sales• Reduce costs to clients• Increase operational efficiency• Become more competitive

• Align with customer/relationship goals; e.g., • Six Sigma, cost savings, risk sharing

• Make continuous improvement a part of business strategy and cascade it to associates through goals set at organization level; e.g.,• Number of improvements suggested from associates• Number of approved and deployed suggestions• ROI from improvements

• Acknowledge that every person in the organization has at least one idea for change every day ― keep this acknowledgement focused so all understand and appreciate its value

• Reward contributorsLook everywhere for improvements

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Soliciting Improvement Proposals

Multiple mechanisms for gathering suggestions

PIPs recd/implemented per 100 associates

10.2917.48

21.73

32.90

46.42

1.43 4.10 3.98 3.79 4.63

0

10

20

30

40

50

99-00 00-01 01-02 2002-03 2003-04

PIPs

Year

PIPS received per 100associates

PIPs implemented per 100associates

Process Improvements

CSS and Customer feedback

ESS CFTs handling workforce practices,

e.g. transport, canteen..

User groups giving requirements to Ultimatix (including PAL and IPMS CCBs)

Action proposed from DATA analysis of process performance, comparative

performance

Grievance Handling,

PEEP, PROPEL

PIPs

PIP trends

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Limits to OID/CWI possibilities

After an organization achieves a Level 5 the model cannot guide advancing continuous improvements

The organization must do all it can to motivate change input from all membersThe organization must value and fund the handling of all change inputs, some

of which will be not selected for change, but some of which offer the possibilities of breakthrough

Mature relationships benefit more by OID and CWI; e.g., • Working in partnership mode with aligned goals for the organization

and customer • Both parties working for end user benefits; e.g., Six Sigma

• Willing to innovate and manage associated risks with change• Understand the value of measuring change

• All organizations regardless of level benefit by starting and measuring earlier than Level 5

• As external innovation never ceases, keep a keen eye to externalchanges

• OID and CWI pay for themselves; they have an significant ROI

There are no limits except those chosen!

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AcknowledgementsAcknowledgements

• All those who have contributed to improvement of TCS processes and our customers’ processes• TCS Management, DCs, Relationships, Associates• Our customers

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Q & A

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Contact InformationContact Information

[email protected]@[email protected]

Web Siteswww.tcs.comwww.stt.com

March 8, 2005 Seattle, WA SEPG 2005 OID and CWI · PDF file2 Relationships in OID and CWI Key...

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